It Is Not Enough Only to Change the Government
Everyone on the left can agree that we must change the government. But if Labour wins in 2026 and refuses to transform the system generating extreme inequality, NZ society will continue to fragment.
Change the government. This is currently the unanimous goal of trade union leaders, left-wing politicians and progressive NGOs. At rallies, activist meetings and party conferences, everyone can agree: this Coalition must fall.
It’s not hard to see why. The three-party National-ACT-New Zealand First Coalition constitutes the most right-wing government this country has endured in three decades. Christopher Luxon was appointed Prime Minister less than two years ago; his government wasted no time in tearing up the legacy of its predecessors. Progressive reforms won through years of campaigning, from Fair Pay Agreements to the ban on new offshore oil and gas drilling, went up in smoke.
The Coalition has pursued a harsh austerity agenda in the midst of an economic crisis. Already-struggling public services have been cut to the bone; public servants have been laid off amidst already-rising unemployment; benefit sanctions have increased and people have been thrown out of emergency housing and into the streets. The health system is being starved of funding and the previous government’s pay equity scheme has been gutted in order to fund tax cuts for the rich and more money for prisons and defence. The economy has faltered, despite the government’s attempts to power a new economic boom by opening new fossil fuel projects in defiance of international climate commitments.
At the same time, David Seymour has gone out of his way to provoke an incendiary debate about Te Tiriti o Waitangi. ACT’s rejected Treaty Principles Bill and the subsequent Regulatory Standards Bill seek to remove indigenous rights from the bedrock of our governing structures and replace them with libertarian ideology which prioritises corporate interests over all else.
The left is united in our desire to see Luxon ousted and Winston Peters sent into long-overdue retirement. We all want to see the mocking grin wiped off Seymour’s face. Everyone is against the Coalition’s agenda, and everyone wants to see change. What this change might look like is harder to say.
The next election is now a little over a year away. Anything could happen in 2026; the polls are neck-and-neck. What if our wish is granted? What happens if we do change the government?
The Centre Cannot Hold
There is a void opening up at the heart of New Zealand politics. The country which stood a decade ago as a beacon of stability against the backdrop of global upheaval is now experiencing the same trends we have witnessed overseas. Society is fragmenting as politics on both the left and the right grows more angry, more polarised — more open for contestation. The defenders of the status quo, the ‘centre ground’ which held an iron grip on political discourse at the turn of the century, are feeling the ground beneath their feet begin to shake.
In the mid-2010s, John Key and Bill English led one of the most popular governments in the developed world. His centre-right government held firm as the shockwaves of the Global Financial Crisis and the subsequent European Debt Crisis fragmented politics in the US and Western Europe. Trump was elected President; far-right parties surged in France, Germany, Italy; Britain voted for Brexit.
Sanders ran Clinton close in the Democratic Primary; Corbyn was elected UK Labour leader; radical left-wing parties in Greece, Spain, France and elsewhere threatened to topple the traditional parties of the centre-left. Not here.
2017 saw Jacinda Ardern defeat the National government with the help of NZ First and the Greens. Ardern promised “transformational change” when first elected, yet in practice she led a standard incrementalist centre-left government. She was popular nonetheless as the new decade began, and her leadership during the Covid-19 pandemic earned her an historic landslide victory in 2020. Ardern faced no sustained challenge from her left, and it looked like the centre ground in Aotearoa was holding firm.
Few heeded the lessons we should have been learning from overseas:
One: that growing inequality was the primary force which in country after country was eroding support for the centre ground. Working people across the developed world had spent decades watching the rich get richer as their living standards stagnated. The combination of the economic shocks of 2007-2011 and the austerity that followed was the final straw. The anger and resentment didn’t come from nowhere: the notion that elites were out of touch with public opinion, that peoples’ lives were getting harder while governments actively made the situation worse, was entirely justified.
Given that Aotearoa has had high levels of income and wealth inequality since the neoliberal revolution of 1984-1993, this necessarily meant that it was only a matter of time before the centre started to collapse here. The pandemic years of 2020-2021 saw another record increase in wealth inequality on Labour’s watch.
Two: that when the public mood changes, the tide can turn very rapidly. And it did.
The 2023 Election
Ardern stepped down at the beginning of 2023. Chris Hipkins took over as Prime Minister and immediately shifted Labour further to the right, scrapping several policies in the process. In the lead up to the election, Hipkins ruled out any taxes on wealth or capital gains, despite polls showing that a majority of voters supported both policies.
An IRD report commissioned by David Parker before the 2023 budget revealed that the 311 richest families in the country held between them a combined net wealth of $85 billion — 276 times more than the average Kiwi household — and that the average tax rate of the wealthiest households in the country is less than half the rate paid by most New Zealanders. Tackling this unjust tax system and the inequality it creates will be unavoidable for any government intending to meaningfully transform Aotearoa in the interests of working people.
Unlike Ardern, Hipkins did not even pretend to be interested in delivering transformative change. At the election, the government suffered a devastating defeat. Labour lost nearly half of its vote, breaking multiple records in the process: most votes ever lost by the Labour Party (down 676,310); biggest ever swing between the two parties (18.2% swing to National); largest loss of vote share by any political party in either New Zealand or Australia (down 23.1%). It was the party’s second worst defeat since the 1920s, with a vote share of 26.9% putting it only marginally ahead of the 2014 nadir of 25.1% under the much-maligned leadership of David Cunliffe.
Labour lost votes to both its right and its left. The Green Party won 15 seats, one more than its previous record of 14 achieved in both 2011 and 2014. Te Pāti Māori likewise achieved its best ever result, winning 6 of the 7 Māori electorates; the party that had been part of John Key’s governing coalition in the 2010s had moved firmly to the left. This meant 21 seats for parties to the left of Labour, breaking the previous record of 17 set when the Alliance won 10 and the Greens won 7 in 1999.
The National Party had won, but it had done so with just 38.1% of the vote — fewer votes than it had achieved in the defeats of 2005 (39.1%) or 2017 (44.5%). This meant the party had to form a coalition with both the ACT Party and New Zealand First. The combined vote share for National and Labour in 2023 fell to 65%, close to the historic low of 62% recorded in both 1996 and 2002.
ACT won 11 seats, up from its previous best result of 10 seats last election. No party to the right of National had ever won this many seats before. NZ First now also stood on National’s right flank; Winston Peters had spent years as a ‘kingmaker’ who campaigned mostly in the centre ground, but in the wake of his party’s worst ever result in 2020 he pivoted to a right-wing populist platform and ruled out working with Labour. While 8 seats for NZ First was less than half the party’s 1996 record of 17, it still marked a major recovery.
2023 was the first election in which it was clear that politics in Aotearoa had begun to fragment. In the wake of the pandemic, in the midst of the cost-of-living crisis, the recession and the housing market crash, the centre is losing its grip on the country, and forces are arising on the right and the left. The trend of growing polarisation overseas has come here, and it has come here to stay — all evidence abroad says that this polarisation will only intensify in coming years.
The New Reality
As cracks began to appear in the existing consensus, the right-wing parties rapidly adapted. ACT and NZ First are pulling National to the right, and the Coalition is thus using this moment of crisis to rapidly advance its agenda.
If the fragmenting of politics is caused by increasing inequality, then surely the Coalition, whose policies are accelerating this process, will be voted out in a landslide defeat at the next election?
There are two reasons we cannot be confident of this outcome:
Firstly, the right has learned from overseas experiences how to adapt to the fragmentation of politics and the climate of anger and anti-elite sentiment. It is no coincidence that Seymour and Peters are aggressively pushing ‘culture war’ issues and using the language of ‘anti-woke.’ The aim is to ensure that the political debate is shifted away from questions of austerity and inequality as much as possible.
The right-wing parties will continue to adapt to the changing terrain of politics. These parties, and the ecosystem of think tanks and lobby groups which support them, will always be better funded and resourced than the left. Their task is to divide-and-rule.
Secondly: it is unclear if Labour has any policy positions at all right now, let alone transformative solutions to the crisis our society is experiencing.
The Coalition is not popular. Most polls show that voters disapprove of Luxon and believe the country is headed in the wrong direction. Yet National and Luxon still hold razor-thin leads over Labour and Hipkins, and the combined polling averages show the three opposition parties trailing the Coalition by a small margin (see below).
Anger at inequality and elites is reflected in surveys. The 2025 Acumen Edelman Trust Barometer found that 67% of New Zealanders hold a sense of grievance against business, government and the rich, compared to 62% of Australians and 59% of Americans. Just 19% of New Zealanders believe that the next generation will be better off than they are today. 69% of respondents to a report on Social Cohesion in New Zealand by the Helen Clark Foundation agreed that the gap between the rich and the poor is too high. 11% of respondents believe that our system of government should be entirely replaced; 27% believe that major change is needed, 37% favour minor changes, while just 17% agree that “the system of government works fine.”
The Labour Party appears totally disinterested in capitalising on this sentiment. Sure, Hipkins and his frontbench want to change the government. They rail against Coalition incompetence, against Luxon and Finance Minister Nicola Willis’ obvious failure to help people struggling through the cost-of-living crisis. But when asked about what Labour will do in government, the party goes conspicuously silent.
Labour appears to be pursuing the strategy that Australian Labor leader Anthony Albanese used to win the 2022 election — a “small target” campaign. This involves putting forward as few policies as possible, creating the smallest possible set of issues for your opponents to attack you on. It’s a strategy based on the unpopularity of an incumbent government. The problem is that whilst the Coalition is unpopular, so is the New Zealand Labour Party.
The Australian economy is in better health than ours. Wages are higher and conditions are generally better for workers — hence why so many young Kiwis are moving to Sydney and Melbourne. Australia remains, amongst the developed world, a bastion of political stability and relative economic prosperity.
Aotearoa can no longer say the same. The Helen Clark Foundation noted a growing divergence in social attitudes between Australians and Kiwis. New Zealanders are increasingly alienated by our broken economic model. As a result, societal trends are now heading in the same direction as the US and western Europe.
A “small target” campaign is not going to appeal to voters in the current climate. The economic system is not delivering for working people, and they want to hear what the different parties are going to do to fix it. They will not accept Hipkins simply stating that Labour will make things better without saying how. Vague promises of a focus on “jobs, health and homes” are not enough.
The 2026 election is currently poised to be very close. It is possible that the economic situation will worsen and Hipkins will coast back into office having offered very little. There will be no rhetoric of “transformational change,” like what was promised and never delivered by Ardern. Perhaps Labour will offer a revenue-neutral capital gains tax offset by income tax cuts; means-tested dental care; more funding for health, education, police and prisons; a higher minimum wage.
Labour will reverse the most high-profile and unpopular Coalition policies. But Hipkins has criticised the government for repealing so many of its predecessors’ policies, and claimed that an incoming Labour government will not do the same. This one-sided commitment to ‘bipartisanship’ is nothing more than unilateral disarmament.
It also fits neatly into the pattern we have seen over the last 40 years. Radical right-wing governments, such as the free market reformers of the 1984-1990 Rogernomics era and the Ruthanasia that followed in the 1990s, are followed by moderate centre-left governments which refuse to fundamentally overturn the policies of their predecessors. Neoliberal policies implemented at lightning speed lead to significant increases in poverty and inequality, yet Labour governments — under the leadership of Clark, Ardern and Hipkins — leave most or all of these reforms intact. Zoom out, and you will see a constant trend of politics moving right, the rich getting richer and the working class getting poorer, with no end in sight.
A moderate, incrementalist repeat of the Clark and Ardern governments is the best-case scenario we can expect next time Labour is in power. The other possibility is worse: that Hipkins will follow the example of UK Labour Prime Minister Keir Starmer, or his counterparts in much of Europe, and implement austerity in a direct betrayal of his own supporters.
This scenario is contingent on the economic situation. In times of high economic growth, centre-left governments are able to deliver reforms such as increased social spending and a strengthening of workers’ rights in order to benefit their supporters and smooth over capitalism’s roughest edges. During times of economic crisis however, with rising unemployment and falling government revenue, the logic of the capitalist system dictates that governments must reduce spending. Alarm bells are sounded by Treasury officials, bankers and economists, echoed by uncritical media commentators, about “black holes” in the public finances and the need for “belt-tightening.” No matter that it is never the rich who are made to tighten their belts.
These are the economic pressures which produced the Fourth Labour Government in Aotearoa, and the fire-sale of privatisation and deregulation it unleashed. These pressures led the Starmer government in the UK to plummet in popularity almost immediately following its July 2024 election victory; no one voted Labour knowing that the new government would cut winter fuel payments for pensioners and benefits for disabled people. The same pressures in France sent Socialist President François Hollande down in flames along with his entire party after he promised to end austerity only to continue cutting spending once in office. The same will happen here if Labour is elected in the midst of a prolonged recession.
Capitalism relies upon sustained economic growth to deliver just enough wealth to just enough people in order that the fundamental inequality inherent in the system goes unchallenged. When growth dries up in moments of economic crisis, politics suddenly becomes zero-sum. Either the working class or the capitalist class must suffer. In the era of global oligarchy we are currently in, it is invariably the workers who are made to pay.
In a zero-sum scenario, wealth redistribution is the only way that working class living standards will rise. Since the 1980s, we have been experiencing upwards redistribution of wealth, where the rich keep getting richer and everyone else is made to pay. This trend is felt most acutely during times of crisis, where living standards have to fall for someone, and it’s never the rich who suffer.
Hipkins does not speak in the language of zero-sum politics; he does not speak about winners and losers. In his 2025 State of the Nation speech, delivered to the Auckland Chamber of Commerce and followed by a Q&A hosted by former National Party leader Simon Bridges, Hipkins articulated a vision of government working in partnership with businesses and unions to grow the economy and find solutions to the challenges we face. He acknowledged that the neoliberal economic model has created huge inequality over the last 40 years, and that the problems caused by that inequality are “coming to a head,” but his solution is simply for everyone to get along under Labour’s wise leadership. It is hopelessly naïve.
As things currently stand, the rich keep winning and everyone else keeps losing. Under a programme of wealth redistribution on the scale necessary to tackle the structural inequality in our society, the rich will lose out and everyone else will benefit. Hipkins does not speak in these terms, either because he does not comprehend the scale of the crisis; or because he believes in magical solutions which ignore the class conflict that will be necessary to solve it; or because he understands the crisis, understands the radical solutions that are necessary, has no intention of enacting these solutions, and is simply trying to win votes by pretending the problem will fix itself if Labour wins.
The next Labour government will face either one of two scenarios. Either there will be a miraculous economic boom, and Hipkins may be able to get away with merely tinkering around the edges of a broken system for a time. Or the economy will continue to stagnate, following the trend of the entire developed world stagnating since 2008, and Labour’s refusal to redistribute wealth and deliver anything meaningful to its working class supporters will cause widespread feelings of anger and betrayal.
Either way, whether the crisis is immediate or deferred, a political energy will be produced that will eventually go somewhere. The inequality crisis is not going anywhere, it is deepening, and it is eroding the foundations of our society and polarising our political system just as has happened in most of the western world. Discontent is growing, and increasing numbers of people are searching for alternatives.
Yes, everyone on the left believes we need to change the government. But that message alone is woefully inadequate. To stop our society from fragmenting, to address the anger that is festering and to stop the rise of an increasingly radical right, we must stop the upwards redistribution of wealth and send it into reverse.
Wealth must be redistributed, the government must change, and the economic system must change. There is no other progressive alternative.
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My name is Elliot Crossan, and I am a socialist writer and activist based in Tāmaki Makaurau Auckland. I am the Chair of System Change Aotearoa, an ecosocialist campaign group. You can check out our website here.
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All about Labour despite Labour needing to be part of a coalition government - it won't get enough support to govern alone.
So a fundamental starting point surely is that Labour, Greens and Te Pāti Māori get together and develop basic principles and policy that all agree will be the basis for a progressive coalition government, to campaign on.
It would mean Labour having to change from its sense of entitlement to progressive, legt wing votes.
An excellent overview Elliot. I agree with everything you wrote, particularly wrt Hipkins. He is infinitely better than Luxon but he is a politician first and who knows what he really believes. In a perverse mirror image of this government it may be up to The Greens and TPM to drag Labour towards meaningful wealth distribution, won’t the media love those tails wagging the centrist dog!